Post Script: Don’t pay off student debt


(12/2/2020)

by Frances Edstrom, columnist

 

As the baby boomer generation finally made its way through college and into the workforce, colleges found themselves with many extras: extra dorm space, extra faculty, and extra pressure to figure out a way to keep from closing their doors.

Baby boomers, unlike their parents, chose to have fewer children.

However, baby boomers also wanted these fewer children to have advantages they didn’t have growing up, and many more wanted to send their kids to college.

In order to be competitive, colleges began to offer more amenities.

Dormitories became more like hotels. School cafeterias offered a wider range of foods, catering to the more sophisticated tastes of these new college kids. Sports complexes were no longer just a field and a stinky gym.

In order to pay for all this, college tuition rose to mind-boggling amounts. Parents may have wondered how they could afford college costs of $50,000 to $100,000 a year, but the government stepped in with easy student loans.

Not enough people, apparently, wondered how these loans would be paid back. Many kids figured they would snag a job paying $40,000 a year or more upon graduation. Unfortunately, there aren’t enough $40,000 jobs to go around. College continued to become more and more expensive.

With the advent of the Great Recession, and now the economic crisis caused by pandemic shut-downs, many have delayed payment or defaulted altogether on their student loans.

Now there is a call for president-elect Joe Biden to forgive student debt, either partially, or in toto. I have sympathy for those who are saddled by enormous student loans. When I was in a position to hire employees, I was astounded by the number of applicants who had four-year degrees in fields that required employees with two-year degrees, and sometimes no degrees at all, with a commensurate salary. Easy money, unscrupulous colleges, and people who don’t research their after-graduation prospects are a lethal combination that has produced an enormous drag on our economy.

However, paying off their debt will not solve the larger problem, and it certainly won’t prevent future college students from graduating with enormous debt.

It used to be that kids could pay off a quarter to a half, or sometimes all, of their college costs by working during the summer and on holidays. That is no longer possible, because college is just too expensive. For real change to happen, college must be more affordable, more in line with the economy as  whole, and not because the government is paying for it.

Most people don’t need a four-year college education to live a middle-class or better life. Lavish student loans and lenient admissions policies prevent college graduates from entering the middle class.

What about those people who chose not to go to college because they did the math and figured it wasn’t a good investment for them? What about people who have scrimped and saved, and paid off their student debt?

What is the government doing for them, by making them help pay off debt for others?

The best thing to do for those with great student debt is to get the economy back to the growth we were seeing before the pandemic hit. When the economy is humming, it will produce better-paying jobs that will enable people to be able to pay off their debts, whether student loans or home mortgages.

Lower college cost, better job counseling for high school students, and better job prospects are the key, not throwing good money after bad.

 

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